diff --git a/core-tests/shared/src/test/scala/zio/stm/ZSTMSpec.scala b/core-tests/shared/src/test/scala/zio/stm/ZSTMSpec.scala
index b62128efc4d..d33dbf9cd94 100644
--- a/core-tests/shared/src/test/scala/zio/stm/ZSTMSpec.scala
+++ b/core-tests/shared/src/test/scala/zio/stm/ZSTMSpec.scala
@@ -873,6 +873,24 @@ object ZSTMSpec extends ZIOBaseSpec {
         val right = STM.fail("right")
 
         (left orElse right).commit.exit.map(assert(_)(fails(equalTo("right"))))
+      },
+      test("retries on LHS variable change") {
+        for {
+          ref1 <- TRef.makeCommit(0)
+          ref2 <- TRef.makeCommit(0)
+          txn1 = ref1.get.flatMap {
+                   case 0 => STM.retry
+                   case n => STM.succeed(n)
+                 } orElse ref2.get.flatMap {
+                   case 0 => STM.retry
+                   case n => STM.succeed(n)
+                 }
+          txn2    = ref1.set(1)
+          fib    <- txn1.commit.forkDaemon
+          _      <- liveClockSleep(1.second)
+          _      <- txn2.commit
+          result <- fib.join
+        } yield assert(result)(equalTo(1))
       }
     ) @@ zioTag(errors),
     test("orElseEither returns result of the first successful transaction wrapped in either") {
diff --git a/core/shared/src/main/scala/zio/stm/ZSTM.scala b/core/shared/src/main/scala/zio/stm/ZSTM.scala
index 98747a5dbf4..612f9b0c5b1 100644
--- a/core/shared/src/main/scala/zio/stm/ZSTM.scala
+++ b/core/shared/src/main/scala/zio/stm/ZSTM.scala
@@ -1621,15 +1621,30 @@ object ZSTM {
      * Creates a function that can reset the journal.
      */
     def prepareResetJournal(journal: Journal): () => Any = {
-      val saved = new MutableMap[TRef[_], Entry](journal.size)
-
-      val it = journal.entrySet.iterator
-      while (it.hasNext) {
-        val entry = it.next
-        saved.put(entry.getKey, entry.getValue.copy())
+      val currentNewValues = new MutableMap[TRef[_], Any]
+      val itCapture        = journal.entrySet.iterator
+      while (itCapture.hasNext) {
+        val entry = itCapture.next()
+        currentNewValues.put(entry.getKey, entry.getValue.unsafeGet[Any])
       }
 
-      () => { journal.clear(); journal.putAll(saved); () }
+      () => {
+        val saved = new MutableMap[TRef[_], Entry](journal.size)
+        val it    = journal.entrySet.iterator
+        while (it.hasNext) {
+          val entry = it.next()
+          val key   = entry.getKey
+          val resetValue = if (currentNewValues.containsKey(key)) {
+            currentNewValues.get(key)
+          } else {
+            entry.getValue.expected.value
+          }
+          saved.put(entry.getKey, entry.getValue.copy().reset(resetValue))
+        }
+        journal.clear()
+        journal.putAll(saved)
+        ()
+      }
     }
 
     /**
@@ -2051,6 +2066,18 @@ object ZSTM {
         _isChanged = self.isChanged
       }
 
+      /**
+       * Resets the Entry with a given value.
+       */
+      private[stm] def reset(resetValue: Any): Entry = new Entry {
+        type S = self.S
+        val tref     = self.tref
+        val expected = self.expected
+        val isNew    = self.isNew
+        var newValue = resetValue.asInstanceOf[S]
+        _isChanged = false
+      }
+
       /**
        * Determines if the entry is invalid. This is the negated version of
        * `isValid`.